This would be problematic for league networks--especially B1G

[cuseinchina]

it doesn't break down. with alternative distribution, they will still charge a higher price for each channel than they would in a bundle. netflix is a bundle too because it works out for everyone.

if people can get their content in more ways, prices will decrease due to competition, not because of dumb laws about bundling.

i'm all for competition. that will lower prices. i'm against laws against bundling that don't help anyone

Well the cable executives and their internal strategy and finance departments are fairly sure it breaks down and this is playing out in their competitive responses and mid to long range business plans. BR in Philadelphia is very very candid about this in private.

The law is not out of bounds since the cable companies are regulated monopolies and as such nothing they do is optimal for consumers or society. That said it won't pass and it doesn't need to pass. I think you are missing my point which is that this is coming regardless.

Content providers offer all the value but are forced to give away profits at monopoly pricing to a provider of a service that is soon to be commodititzed. They will not continue to do this because the free market and their shareholders won't allow them to now that alternative distribution is becoming available. There may still be content aggregators who bundle content for purchase by consumers who either don't care about price and just want everything, are not too savy, or who just want things to stay the same -- but that would contradict the way everything else having to do with the internet has played out over time. the internet is a place where you get exactly what you want and screen out stuff you don't. People tend to like that. Whether that is good for society or not is debatable...but it's good for a prospective ACC network if it focuses on digital.

 

[Moontan]

WatchESPN – When my connection is solid the HD quality is great, at times it becomes pixelated, if my connection slows. This does not happen enough for me to pay for anything more than lowest broadband tier. The stream runs with about a 10-15 second delay to the live event. This will get better as compression and broadband speeds improve.

In order to legally access WatchESPN content need to have a video subscription from an affiliated ESPN provider.
You claim not to have a video subscription with any provider, hence your use of WatchESPN is questionable, at best.

The industry has a term for that, but I'll refrain from using it here.

 

[Millhouse]

Well the cable executives and their internal strategy and finance departments are fairly sure it breaks down and this is playing out in their competitive responses and mid to long range business plans. BR in Philadelphia is very very candid about this in private.

The law is not out of bounds since the cable companies are regulated monopolies and as such nothing they do is optimal for consumers or society. That said it won't pass and it doesn't need to pass. I think you are missing my point which is that this is coming regardless.

Content providers offer all the value but are forced to give away profits at monopoly pricing to a provider of a service that is soon to be commodititzed. They will not continue to do this because the free market and their shareholders won't allow them to now that alternative distribution is becoming available. There may still be content aggregators who bundle content for purchase by consumers who either don't care about price and just want everything, are not too savy, or who just want things to stay the same -- but that would contradict the way everything else having to do with the internet has played out over time. the internet is a place where you get exactly what you want and screen out stuff you don't. People tend to like that. Whether that is good for society or not is debatable...but it's good for a prospective ACC network if it focuses on digital.

requiring regulated monopolies to simple unbundle will not lower prices. government central planners would have to pass more laws where they set the prices at which point the costs would be borne in other ways (fewer channels, worse content)

content providers finding other distribution methods has nothing to do with the economics of bundling.

 

[Moontan]

There already are ala carte packages.

Only in limited forms. I'm not aware of any providers where one can order only the following:

1. local channels
2. ESPN family of channels (ESPN, ESPN2, ESPNU, ESPNews, ESPN Classic and the alternate channels)
3. regional sports networks

Providers tend to offer tiers of service (100 channels, 150, 200, 300, whatever) and offer some premium packages (HBO, Showtime, regional sports networks, MLB, etc.).

The example I gave above is true a-la-carte package ordering. This is something that may well happen. They'll still charge you for an access fee, and because you're now below some threshold they'll start charging you extra for HD, DVR and guide services. They'll also throw in the Shopping Package... it's free... actually the shopping channels pay the providers to distribute their programming.

 

[cuseinchina]

requiring regulated monopolies to simple unbundle will not lower prices. government central planners would have to pass more laws where they set the prices at which point the costs would be borne in other ways (fewer channels, worse content)

content providers finding other distribution methods has nothing to do with the economics of bundling.

The economics of bundling only work in a closed system with content being pushed in one way...this ignores diverse new ways of monetizing your content that far outweigh any benfit you get from bundling (most of which accrues to the cable provider anyway). The TV channel is becoming obsolete. again this is from cable co execs as well as from my discussions with a u chicago economics professor who is a telecom& cable expert who was on the white house counsel of economic advisers. not pulling it out of my rear end.

 

[Millhouse]

The economics of bundling only work in a closed system with content being pushed in one way...this ignores diverse new ways of monetizing your content that far outweigh any benfit you get from bundling (most of which accrues to the cable provider anyway). The TV channel is becoming obsolete. again this is from cable co execs as well as from my discussions with a u chicago economics professor who is a telecom& cable expert who was on the white house counsel of economic advisers. not pulling it out of my rear end.

ooo la la

have some discussions with a reading teacher.

i'm saying that laws about bundling won't help consumers. of course competition helps consumers. we both agree about that.

 

[Orangemen]

That's not necessarily true. At least once a year they add channels I don't want and my bill goes up.

Sent using my Commodore 64

The networks like ESPN are increasing their carriage fees every year. Even if you got zero new channels, your bill would still go up every year.

 

[rrlbees]

The networks like ESPN are increasing their carriage fees every year. Even if you got zero new channels, your bill would still go up every year.

I'm talking about the bundles and tiers.

Sent using my Commodore 64

 

[Moontan]

But just let me re-iterate that this is not something I've just come up with doing a bit of reading - I talk with cable industry execs as part of my job

I'm in the industry as well.

On the google 1 gpbs 'demo' - Austin texas is no demo - it's a smaller city but the population of young people there are very much like those in Brooklyn or San Fran and so the word of mouth factor is going to be huge.

I'll let you know when my friend in suburban Austin has Gbps service at his house.
I'll also let you know when I have it at mine (suburban Atlanta). We'll hold off on rural America for now.

There will be limited service areas that are offered such services. Hopefully new housing developments will have the necessary infrastructure installed. With an installation cost estimated $1,000 per fiber-to-the-house connection (I'll assume this is for upgrading existing infrastructure areas - it should be less for new construction) it's a huge investment for service providers.

BTW: Provo will likely beat Austin... as they've already invested in fiber infrastructure.

It'll get here at some point. The thought that everybody will have it within 5 years, however, is something that I'm just very skeptical about.

I do agree that the ACC appears to be positioning itself well for this future. More so than the BTN.

 

[Moontan]

They don't need to start up or maintain a server farm. You go with a cloud solution. Netflix is using Amazon's Elastic Compute Cloud (EC2) and Simple Storage Service (S3). Netflix alone is over 33 percent of prime-time Internet traffic in the US.

Yup, Netflix and Amazon are prime examples of aggregators.

I'm 40 and cut the cord over four years ago. My kids (5 and 3) will probably never know what traditional cable is. It will be a sad day in my household, if we are regularly consuming six concurrent video/video game streams.

One of your kids is watching something on Netflix, another is playing a video game, you're watching a live sporting event, your spouse is watching HGTV and your DVR is recording your favorite sitcom & police drama in the background.

Stonybrook was the only football game I had to leave the couch for, everything else, I could see from my livingroom.

DirecTV's regional sports package was the only way for me to pick up SNY. Combined with BTN (Minnesota game) and ESPN I was able to watch them all. You must live somewhere where you can get the non-ESPN games OTA and somehow get free ESPN & BTN. Most of us aren't in that situation.

I also think you're ignoring the gains being made in compression.

Not at all... HEVC will bring a lot of relief... in another year or two.

Until then, I'll take OTA and my video service provider's HD feeds over the lower resolution content that I can str-str-str-stream... (sorry about the buffering). This is especially true for live sporting events.

DRM may provide some relief as well. Content providers/aggregators can pre-seed upcoming shows to media playback devices (DVRs, computers, video gateways, etc.) a few days in advance and simply restrict playback until after a given time (or playback token is available).

 

[WickedOrange]

Yup, Netflix and Amazon are prime examples of aggregators.

They are both beginning to turn out original content, and dam good stuff. Netflix does it without their own servers.

One of your kids is watching something on Netflix, another is playing a video game, you're watching a live sporting event, your spouse is watching HGTV and your DVR is recording your favorite sitcom & police drama in the background.

I don't have the hardware to have that scenario going. To be honest, that sounds like an over-weight family.

DirecTV's regional sports package was the only way for me to pick up SNY. Combined with BTN (Minnesota game) and ESPN I was able to watch them all. You must live somewhere where you can get the non-ESPN games OTA and somehow get free ESPN & BTN. Most of us aren't in that situation.

Can we agree this is a ridiculous scenario?

Brother comes over to watch game, logs in with his Fios account credentials, we run WatchESPN. We are cool as long as he is on the couch. If he goes for a beer run in the 3rd quarter, I'm suddenly breaking the law. Meanwhile I'm pleading to give ESPN and the ACC 20+ bucks a month.

I'm one of the dumber posters on this forum (which makes me a genius over on Rutgers R!val$) and I've figured out an end around to get what I want at a very reasonable price. It's only going to get easier/better for others.

 

[WickedOrange]

DirecTV's regional sports package was the only way for me to pick up SNY. Combined with BTN (Minnesota game) and ESPN I was able to watch them all. You must live somewhere where you can get the non-ESPN games OTA and somehow get free ESPN & BTN. Most of us aren't in that situation.

I can access the BTN with my brothers or dads fios account credentials.

 

[Moontan]

I don't have the hardware to have that scenario going. To be honest, that sounds like an over-weight family.

When your kids get to be teenagers with disparate interests and your wife doesn't enjoy your love of NASCAR you could be in this situation. I don't know what your "over-weight family" comment is about.

Can we agree this is a ridiculous scenario?

Which scenario would that be? Multiple video streams to the household, or your brother not planning properly and having to get more beer?

I'm one of the dumber posters on this forum (which makes me a genius over on Rutgers R!val$) and I've figured out an end around to get what I want at a very reasonable price. It's only going to get easier/better for others.

Yup, piracy is something to be proud of.

 

[IthacaMatt]

From Adweek:

http://www.adweek.com/news/television/cable-la-carte-makes-comeback-congress-149274

Won't happen. Way too much cable TV money in Congress for them to let that happen. Just look at recent FCC rulings - they're all in favor of greater power, and less liability, for media companies.

 

[Moontan]

I can access the BTN with my brothers or dads fios account credentials.

I figured as much.

I just love how people tout that they can cut the cord and still get everything they want.
You should encourage your brother and father to do the same.

 

[WickedOrange]

I figured as much.

I just love how people tout that they can cut the cord and still get everything they want.
You should encourage your brother and father to do the same.

They prefer to be exploited by a monopoly.

 

[IthacaMatt]

I don't think it's good for business to be honest! The cable and satellite companies will still charge you the same if not more in my opinion, they need to maintain their profit margins. Okay, you can opt out of espn but the cable companies are making money by advertising on espn, where's that money coming from now? Cable companies are in business to make money, if they don't get the money from ad space they will just charge people more for their services.

While I agree overall that the cable and telecomm companies are very powerful and will fight like hell to protect their existing business models, I don't think that they'll be able to charge as much for TV service as they do now, if they are forced to go ala carte. First of all, if they charge too much per channel, people will only sign contracts with the cable/telco for their internet access and the cable/telco will get NO share of the TV revenue because people will sign up directly for the online apps from their favorite programmers (e.g. Watch ESPN, etc.). This will be interesting, but I think that McCain's effort is doomed for now.

 

[Toga]

How much do you figure Lifetime will cost?

 

[Moontan]

They prefer to be exploited by a monopoly.

Yup, and you didn't really cut the cord.

Without an extension cord to your brother's/father's house, other than the USC game, you would've been Syracuse football-less.

 

[IthacaMatt]

I'm with you, I like having every channel they offer. Where you putting the SU NCAA game? Ok, I have it, and within 30 seconds, I'll find it.

I do wish McCain would better spend his time proposing a law that allows me to put some type of virtual shock inducing dog fence type functionality on the remote. It will go off when my wife navigates to a channel below 500 on Fios. We pay for HD, watch HD. Otherwise, you are wasting my money. And therefore getting a few volts passed through you.

Jesus, I hate when other people in my household cancel my recordings while I'm away at work because FIOS can only record two things at a time on the DVR. Why is it that every good show is on at 9 or 10 PM on Sunday nights?

 

[WickedOrange]

Yup, and you didn't really cut the cord.

Without an extension cord to your brother's/father's house, other than the USC game, you would've been Syracuse football-less.

My cable bill says otherwise.

 

[IthacaMatt]

You are so not paying $18 for that lineup. Those are some of the most popular channels there are. My guess is that bill would be $90 or more in an a la carte system. Maybe that saves you a couple dollars, I don't know what you pay.

A la carte is bad for someone like you, who watches several popular channels, but will no longer have other people sharing the load.

A la carte is bad for someone who watches more niche networks like Lifetime Movie Channel, Game Show Network, VH1 Classic, etc, because not enough people will by them a la carte for them to exist anymore, without the popular channels subsidizing them.

A la carte is good ONLY for folks who want just one or maybe two very popular channels for their whole family and that's it. You might be able to get the ESPN Networks for $30 and CNN for $15 and cut your cable bill from $100 to $45.

For everyone else, it's going to suck. Once people see what the a la carte world looks like, they aren't going to want it. Even if this passes, once people are given the "option" and start seeing how much they'll pay to get 10 or 20 channels, they will reject it.

Yes, the system is collectivist, but you aren't forced to have cable. But if you do buy cable, this current method (maybe with some tweaks) serves the most people.

A couple hundred cable channels will go out of business within 90 days, once there is a switch to ala carte. That, in turn, will decrease the value of the bundle.

 

[SUinNYC]

YouTube just announced they are going to start charging for some channels. $1 a month. So I guess ala carte is already here.

http://gizmodo.com/youtube-channels-you-have-to-pay-for-are-here-498909473

I do know that I'm willing to pay a couple bucks a month for an ACC channel--and I don't care whether my cable company or YouTube delivers it to me.

 

[Millhouse]

While I agree overall that the cable and telecomm companies are very powerful and will fight like hell to protect their existing business models, I don't think that they'll be able to charge as much for TV service as they do now, if they are forced to go ala carte. First of all, if they charge too much per channel, people will only sign contracts with the cable/telco for their internet access and the cable/telco will get NO share of the TV revenue because people will sign up directly for the online apps from their favorite programmers (e.g. Watch ESPN, etc.). This will be interesting, but I think that McCain's effort is doomed for now.

Forcing them to go ala carte will result in less revenue for cable companies because the price will be too much for people who only watch some channels a little.

But you're ignoring that it hurts viewers. You're not going to pay for all those channels you only watch once in a while. But all those seldom watched channels add up to something. Viewers lose too.

The ala carte argument assumes ignores all channels with a little bit of value to a person that is less than the profit maximizing price in an ala carte only world

in my example, i don't get to see milfs and my wife doesn't get to watch gymnastics ala carte.

like most of john mccain's dumb laws, this makes us all worse off

 

[WickedOrange]

When your kids get to be teenagers with disparate interests and your wife doesn't enjoy your love of NASCAR you could be in this situation. I don't know what your "over-weight family" comment is about.

Honestly, if this is the case in 8-10 years when they’re teenagers… congratulations cable industry you have successfully stifled innovation and the economic growth that goes along with it. I’m so rooting for Google on this one.